Internationally-recognized core labour standards in Hungary

IFCU Report for the WTO General Council Review of the Trade
Policies of Hungary, Geneva, 7–8 July, 1998

EXECUTIVE SUMMARY

Despite the commitments Hungary accepted at Singapore in 1996 and
Geneva in 1998 in the WTO Ministerial Declarations, there are still
violations of the internationally-recognised core labour standards
with regard to freedom of association and discrimination in Hungary.

Although the legislation on trade union rights in Hungary generally
complies with internationally-recognised core labour standards, its
implementation does not always do so. There are various examples of
discrimination and victimisation against union officials, including in
the country's increasingly large foreign-owned sector. Trade
unions are concerned that the pattern of non-implementation of core
labour standards shows that the government believes that foreign
investment, needed to improve Hungary's competitive position on
world markets, is attracted by the ease with which union organisation
and representation can be obstructed. Similar concerns arise with
regard to the attitude of the new private sector employers towards
trade unions and adds to rising pressure on the right to freedom of
association.

Discrimination persists in Hungary despite its ratification of both
the internationally-recognised core labour standards in this
area. Many ILO and UN reports have recommended substantive
improvements in both legislation and policy implementation in Hungary
in order to address these problems.

Hungary is in the final stages of ratifying the main ILO Convention on
child labour. Child labour appears to be minimal in Hungary.

Hungary has ratified both the main ILO Conventions on forced labour
and there have been no reports of forced labour in Hungary since the
opening to democracy.

INTERNATIONALLY-RECOGNISED CORE LABOUR STANDARDS IN HUNGARY

Introduction

This report on the respect of internationally recognised core labour
standards in Hungary is one of the series the ICFTU is producing in
accordance with the Ministerial Declaration adopted at the first
Ministerial Conference of the World Trade Organisation (WTO)
(Singapore, 9-13 December 1996) and endorsed at the second WTO
Ministerial Conference (Geneva, 18-20 May 1998) in which the Ministers
stated: “We renew our commitment to the observance of
internationally recognised core labour standards.”

The report was prepared together with the ICFTU's affiliates in
Hungary, the National Confederation of Hungarian Trade Unions
(MSZOSZ), with about 500,000 members and the Democratic League of
Independent Trade Unions (LIGA) with approximately 100,000 members. In
total trade unions in Hungary represent about 30 per cent of the
workforce.

I. Freedom of Association and the Right to Collective Bargaining

Hungary ratified both ILO Convention No. 87 (1948), the Freedom of
Association and Protection of the Right to Organise Convention and ILO
Convention No. 98 (1949), the Right to Organise and Collective
Bargaining Convention, in 1957.

The 1992 Labour Code recognises the right of workers to organise and
bargain collectively and permits trade union pluralism. It provides
for collective bargaining at the enterprise and industry levels,
although the practice varies widely between sectors. While some
sectors, such as chemicals, electricity and rail transport have almost
complete unionisation, in other sectors unions are almost completely
absent, such as private businesses with less than ten employees.

In the growing private sector, including the large foreign-owned
sector, many employers actively discourage trade union organising by
victimising and discriminating against union officials and
members. The harassment goes unpunished because of ambiguities in the
law and disputed interpretations. Enforcement proves difficult because
the labour courts are overburdened and proceedings can take several
years.

The law provides for various protections of unionists against
discrimination by employers, who can potentially face imprisonment for
violations of the law on freedom of association. However, concern has
been expressed that these provisions are not enforced in practice and
that unionists have not been adequately protected from being isolated
or expelled from workplaces. The ILO Committee of Experts on the
Application of Conventions and Recommendations has recommended that
the government introduce “effective and sufficiently dissuasive
sanctions” in this regard.

Unions further report non-observances of collective agreements and
obstructions to the right to strike. Unions are often forced to meet
outside workplaces. The effect of these restrictions on trade union
rights has been to leave many workers extremely vulnerable to abuse of
their basic rights in the workplace, as demonstrated recently during a
strike by bakers in Debrecen.

Many workers are employed without employment contracts and there are
reports that some foreign companies require women to undergo a
gynaecological examination to ensure they are not pregnant when being
employed. Problems are reported with safety conditions in many
workplaces, due in part to the inadequate level of resources devoted
by the government to labour inspections. A new law was introduced
during 1996 improving labour inspection and increasing fines for
employers who did not comply with labour regulations.

A typical practice of multinational companies has been to establish a
works council as a means of preventing workers from forming a trade
union. The developments at the US-owned United Technologies Automotive
Hungary over 1995-96 provide an example of the violation of freedom of
association in Hungary. The company had no union or works council. The
management subsequently created a committee and appointed its
members. In November 1995, when a group of employees began to form a
union, the union leaders and some of the founding members were sacked
a week after the union had been formed, on the pretext that the
workforce was being reduced. They were subsequently escorted home by
security guards.

In April 1996, a labour court found that they had been dismissed
because of union activities and ordered their reinstatement. The court
dismissed the company's proposal that it should give the unionists
money instead of reinstating them. The company appealed against the
decision and approached the unionists before the case came to
court. It offered them money to request the annulment of the labour
court judgement. The workers accepted, fearing further victimisation
if they returned to the same company. The union ceased to exist.

An example of the failure to protect the right to strike in Hungary is
provided by the foreign-owned company Piszke Paper, where a dispute
began in 1993 when the company was privatised. Management refused to
fulfil the privatisation contract which set a deadline for the
conclusion of a collective agreement and co-operation between employer
and employees. There were cuts in social benefits and no wage
increases. Collective negotiations finally broke down on 26 February,
1996 when Piszke Paper sacked Ferenc Komoroczki, chairman of the local
branch of the Hungarian Paper Workers' union and vice-president of
the national branch union, after the union had organised a strike. He
was also barred from entering the company's premises. The company
intimidated other workers by threatening to close down.

In June 1996 the Labour Court found that the dismissal and the ban
from the factory was illegal, but did not reinstate Ferenc Komoroczki
at the employer's request. It ordered the company to pay him lost
wages. The union appealed against his ban from the company premises
but on 18 September, a court ruled that the ban was legal. On 22
November 1996, the court rejected Komoroczki's appeal for
reinstatement. The union then took its appeal to the Supreme Court,
which in August 1997 ordered Piszke Paper to reinstate
Komoroczki. However, the company sent him on compulsory leave and
after some months, his employment was terminated by mutual
agreement—illustrating once again the contradictions between law
and practice in Hungary.

Although the legislation on trade union rights in Hungary generally
complies with internationally-recognised core labour standards, its
implementation does not always do so. There are various examples of
discrimination and victimisation against union officials, including in
the country's increasingly large foreign-owned sector. Trade
unions are concerned that the pattern of non-implementation of core
labour standards shows that the government believes that foreign
investment, needed to improve Hungary's competitive position on
world markets, is attracted by the ease with which union organisation
and representation can be obstructed. Similar concerns arise with
regard to the attitude of the new private sector employers towards
trade unions and adds to rising pressure on the right to freedom of
association.

II. Discrimination and Equal Remuneration

According to the National Report of the Republic of Hungary prepared
for the UN 4th World Women's Conference in 1995, women earn on
average 25 per cent less than their male counterparts. Such wage gaps
rise to 40 per cent in industries with a predominantly male
workforce. The national trade union centre MSZOSZ categorically
refuted the government's assertion in 1994 that lower wages did
not result from discrimination, but were because “men frequently
perform harder and more difficult work; and women may be responsible
for family duties and therefore cannot be counted on.” The ILO
Committee of Experts on the Application of Conventions and
Ratifications observed in 1997 that Hungary needed to amend its
legislation on equal remuneration to make it clear that such
legislation applied “to all aspects of remuneration and not only
the basic wage”.

The number of women in middle or upper managerial positions in
business and government is low. Furthermore, women are barred from
performing a long list of jobs considered detrimental for their
health, including driving transport vehicles, large trucks or tractors
and piloting aircraft. The ILO Committee of Experts has recommended
that the list be reviewed so that it could not give rise to
discriminatory practices.

The law does not prohibit sexual harassment in the work place. A 1995
report prepared under the auspices of the UN to evaluate compliance
with the Convention on the Elimination of Discrimination Against Women
termed sexual harassment in the workplace as “virtually
epidemic.” Women's groups report that there is little
support for efforts to criminalise sexual harassment and that
harassment is tolerated by women due to their fear of unemployment.

Despite its own responsibilities as an employer, the government of
Hungary has conceded that discrimination in the public sector takes
place on a degree similar to that in the private sector.

Budget cuts, arising from the difficulties of economic transition,
caused the number of day care centres to fall by 30 percent between
1994 and 1996. Due to the unequal distribution of child-care
responsibilities between men and women, this is creating particularly
serious obstacles for women seeking to return to the workforce after
childbirth.

In November 1997, the ILO Governing Body appointed a tripartite
committee, under the provisions of Article 24 of the ILO Constitution,
to look into the non-compliance of Hungary with Convention No. 111,
the Discrimination (Employment and Occupation) Convention. The
investigation is taking place due to discrimination against women in
the government's implementation of the dismissal of 10,000
university lecturers as part of cut-backs in higher education
spending. In many cases, women lecturers are being disproportionately
dismissed with no regard to any defined objective criteria for
deciding who should be made redundant.

Discrimination against the Romani (gypsy) community, who constitute at
least 4 percent of the population, makes their conditions of work and
life significantly worse than among the general population. Roma are
considerably less educated, with lower than average incomes and life
expectancy. The Romani unemployment rate is estimated to be 60 to 85
percent, over six times the national average of 10.3 percent. In July
1997 the Government published a plan designed to improve living
conditions in Romani communities, with specific focus on public
health, education, and work training.

With respect to discrimination against the disabled, a September 1997
decree required all companies that employ over 20 persons to reserve 5
percent of their jobs for the physically or mentally
disabled. However, services for the disabled are limited and most
buildings are not wheelchair accessible.

Discrimination persists in Hungary. Many ILO and UN reports have
recommended substantive improvements in both legislation and policy
implementation in Hungary in order to address these problems. The
government of Hungary should certainly implement these recommendations
and undertake increased efforts to overcome discrimination.

III. Child Labour

The Hungarian Parliament completed the procedures for ratification of
ILO Convention No. 138 (1973), the Minimum Age Convention, in February
1998. Hungary is presently in the final stages of discussion with the
ILO concerning the completion of formalities necessary for ILO
registration of the ratification.

Employment is illegal below the age of 14 while education is mandatory
up to the age of 16. Child workers between the ages of 14 and 16 are
prohibited from night shifts and hard physical labour.

There does not appear to be any significant violation of these
laws. However, Romani children are far more likely than non-Roma to
drop out of school before age 16 and begin work in the informal
sector, often within their family.

Child labour appears to be minimal in Hungary. However, the government
needs to address the associated problem of non-attendance at school,
particularly among ethnic minorities.

IV. Forced Labour

The law prohibits forced labour and there have been no reports of
forced labour in Hungary since the opening to democracy.

CONCLUSIONS

All seven ILO Conventions on core labour standards have been ratified
by Hungary. However, there are still violations of core labour
standards, particularly with regard to freedom of association and
discrimination. The violation of trade union rights in Hungary,
including in the country's increasingly large foreign-owned
sector, impinges on unions' ability to engage in free collective
bargaining.

In line with the views of the ILO Committee of Experts on the
Application of Conventions and Recommendations, the government of
Hungary needs to implement measures to ensure the full application of
the protection of the right to organise. The government should monitor
implementation of the 1996 law improving labour inspection and
increasing fines for employers who do not comply with labour
regulations, with a view to introducing supplementary provisions if
necessary. Measures are needed to enable labour courts to cope with
the volume of work and speed up their decision-making procedures.

The government of Hungary should implement the many recommendations of
ILO and UN reports to tackle the grave discrimination in
Hungary. Urgent measures are particularly needed to improve the
legislation on equal remuneration and to introduce legislation to
prohibit sexual harassment in the workplace.

The government needs to address the problem of child labour in the
informal sector as shown by the rates of non-attendance at school,
particularly among ethnic minorities.

In line with the commitments accepted by Hungary at the Singapore WTO
Ministerial Meeting and its obligations as a member of the ILO, the
government of Hungary should therefore provide reports to the WTO and
the ILO on its legislative changes and policy measures with regard to
respect for these internationally-recognised core labour standards.

The WTO should request the ILO to intensify its work to assist the
government of Hungary to respect the commitments it undertook to
observe core labour standards at the Singapore and Geneva WTO
Ministerial Conferences, and provide a report to the WTO General
Council on the occasion of the next trade policy review.

References

ICFTU, Annual Survey of Violations of Trade Union Rights, 1997.

ILO, Reports of the Committee on Freedom of Association, 1993-98.

ILO, Reports of the Committee of Experts on the Application of
Conventions and Recommendations, 1993-1998.

LIGA (Democratic League of Independent Trade Unions), various
materials.

Ministry of Labour of Hungary, National Report of the Republic of
Hungary, prepared for the UN 4th World Women's Conference in 1995.